The Cato (CATO) AI Stock Analysis

• Market Cap: $68.73M
• Dividend Yield: N/A
• Average Volume (3M): 66.85K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.60
• Revenue Growth: -1.01%
• EPS Growth: 65.04%
• Country: US
• Employees: 7,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): -0.28
• Shares Outstanding: 17,984,955
• 10 Day Avg. Volume: 40,364
• 30 Day Avg. Volume: 66,848
• PEG Ratio: 0.21
• Price to Book (P/B): 0.40
• Price to Sales (P/S): 0.10
• P/FCF Ratio: -2.33
• Enterprise Value/Market Cap: 2.19
• Enterprise Value/Revenue: 0.23
• Enterprise Value/Gross Profit: 0.71
• Enterprise Value/Ebitda: 159.38
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 45 Neutral
• Price Target: $3.50 ▲(0.29% Upside)

Cato's overall stock score is primarily impacted by its challenging financial performance, with negative net income and cash flow issues. Technical analysis indicates bearish momentum, while valuation suggests potential for income-focused investors due to a high dividend yield. The absence of earnings call data and corporate events limits additional insights.

Positive Factors

Business Model

The Cato's dual-channel approach, combining retail and e-commerce, provides resilience and flexibility in reaching diverse customer bases.

Market Position

By targeting a broad demographic with affordable fashion, The Cato strengthens its market position and customer loyalty, supporting long-term growth.

Product Offering

Strategic partnerships enhance product diversity and exclusivity, potentially increasing customer attraction and retention over time.

Negative Factors

Profitability Challenges

Negative profitability impacts The Cato's ability to reinvest in growth and innovation, posing a risk to its long-term financial health.

Cash Flow Issues

Negative cash flows limit The Cato's financial flexibility, affecting its capacity to manage operations and invest in strategic initiatives.

Financial Leverage

Reliance on debt, while manageable, could constrain The Cato's financial options and increase vulnerability to economic downturns.

The Cato Business Overview & Revenue Model

Company Description

The Cato (CATO) is a leading retailer specializing in women's fashion, offering a wide range of apparel, accessories, and footwear. The company operates in the retail sector, focusing on providing stylish and affordable clothing options for women of all ages. With a robust brick-and-mortar presence complemented by an online store, The Cato aims to deliver a seamless shopping experience characterized by quality products and excellent customer service.

How the Company Makes Money

The Cato generates revenue primarily through the sale of its apparel and accessories in its physical stores and online platform. The key revenue streams include direct sales from their retail locations, e-commerce transactions, and seasonal promotions that boost sales volume. Additionally, The Cato capitalizes on strategic partnerships with suppliers and manufacturers to optimize inventory costs and enhance product offerings. The company also engages in loyalty programs that encourage repeat purchases, contributing to a stable revenue flow.

The Cato Financial Statement Overview

Summary

Cato faces significant financial challenges with negative net income, declining EBIT and EBITDA margins, and negative operating and free cash flows. The balance sheet shows moderate leverage but negative return on equity, indicating profitability issues.

Income Statement

The Cato's income statement shows a challenging financial position with negative net income and declining EBIT and EBITDA margins in the TTM period. Although there is a slight revenue growth of 1.23% in the TTM, the company struggles with profitability, as evidenced by negative net profit margins. The gross profit margin remains relatively stable, but the overall trajectory indicates financial strain.

Balance Sheet

The balance sheet reflects moderate financial leverage with a debt-to-equity ratio of 0.75 in the TTM, which is manageable but indicates some reliance on debt. The return on equity is negative, highlighting profitability challenges. The equity ratio suggests a reasonable proportion of assets financed by equity, but the declining equity base is a concern.

Cash Flow

The cash flow statement reveals negative operating and free cash flows in the TTM, with a significant decline in free cash flow growth. The operating cash flow to net income ratio is negative, indicating cash flow issues. The free cash flow to net income ratio is positive, suggesting some ability to cover net losses, but overall cash flow management remains a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	660.06M	649.81M	708.06M	759.26M	769.27M	575.11M
Gross Profit	212.66M	203.55M	233.88M	238.52M	303.85M	127.24M
EBITDA	946.00K	-6.24M	-3.90M	12.94M	51.39M	-57.94M
Net Income	-9.61M	-18.61M	-22.59M	41.00K	34.91M	-45.39M
Balance Sheet
Total Assets	450.23M	452.36M	486.82M	553.14M	633.77M	591.45M
Cash, Cash Equivalents and Short-Term Investments	78.97M	77.70M	102.95M	128.66M	165.76M	143.93M
Total Debt	159.98M	145.90M	153.12M	174.77M	184.33M	206.74M
Total Liabilities	282.59M	290.06M	294.50M	326.55M	379.57M	344.95M
Stockholders Equity	167.64M	162.30M	192.32M	226.59M	254.20M	246.50M
Cash Flow
Free Cash Flow	5.44M	-27.62M	-12.05M	-6.06M	55.68M	-44.67M
Operating Cash Flow	9.16M	-19.75M	477.00K	13.37M	59.79M	-30.71M
Investing Cash Flow	6.58M	28.96M	19.78M	16.02M	-25.33M	64.51M
Financing Cash Flow	-2.41M	-14.05M	-16.13M	-29.28M	-31.80M	-27.18M

The Cato Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3.49
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CATO, the sentiment is Neutral. The current price of 3.49 is below the 20-day moving average (MA) of 3.51, below the 50-day MA of 3.90, and above the 200-day MA of 3.28, indicating a neutral trend. The MACD of -0.12 indicates Negative momentum. The RSI at 49.49 is Neutral, neither overbought nor oversold. The STOCH value of 82.46 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CATO.

The Cato Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DLTH	52 Neutral	$126.22M	―	-24.97%	―	-6.13%	-215.18%
DXLG	51 Neutral	$51.73M	―	-3.58%	―	-9.85%	-137.20%
TLYS	48 Neutral	$44.80M	―	-43.51%	―	-11.10%	-10.31%
RENT	47 Neutral	$33.19M	―	―	―	0.20%	18.30%
LVLU	46 Neutral	$12.37M	-0.25	-195.23%	―	-12.10%	-44.14%
CATO	45 Neutral	$68.73M	-7.78	-5.58%	―	-1.01%	65.04%